The web address did not work in my above post so I have posted the story from the Australian here (by Mark Westfield)

Samuel a TAB chief steward

July 31, 2003
GRAEME Samuel can start addressing his very full in-tray now that he has formally won his five-year term as Australian Competition and Consumer Commission chairman.

And one issue about to spit out of the pipeline on to his desk is the attitude of the state-based TABs to the threat of potential competition to their wagering monopolies.

The TABs of NSW, Queensland and Victoria want state legislation banning the looming competition and look set to draw on all the influence they command with their governments to protect their monopolies.

Tabcorp pays the Victorian Government a total of $460 million in taxes and pumps $350 million into the Victorian racing industry, which buys a lot of influence.

The most bitter opponent of any rival betting system, NSW's Tab Limited, pays its state Government $210 million and its racing industry $190 million.

Surprisingly, perhaps, Racing Victoria's chief executive, Neville Fielke, has said publicly that he sees the arrival of a new player as an opportunity rather than a problem. The owner of the product, the racing itself, is fairly relaxed about a bit of competition.

What has worked the TABs into such a condition has been the arrival of the UK betting exchange, Betfair, which has been taking bets on Australian horse racing since February through its UK-based website.

It wants to set up an operation in Australia, but is awaiting some clarity in the foggy regulatory climate. Betfair claims that at present taxes, and licensing and racing product fees, are paid in the UK. If it can set up in Australia, then it says this money stays in the country.

All of the states and territories floated their totalisator agencies in the mid-to-late-1990s and, in order to give investors confidence about the future, protected the TABs with long periods of exclusivity – 100 years in the case of Tab in NSW and Unitab in Queensland.

The TABs see Betfair as a threat to their business and, they claim, to the very integrity of racing. They assert to their state ministers that as Betfair is not licensed in any state or territory, then it it operating illegally and so should be shut down, although this might be hard to enforce.

Betfair responds that betting exchanges are not illegal and not subject to the exclusivity arrangements applying to the state totes, so they must be legal.

This columnist has no interest in totalisator betting, any rival system, or in horse racing generally, but takes a close view of the issue of monopolies trying to defend their privi leged positions, particularly when they lobby for legislation to ban potential rivals.

This is where Graeme Samuel steps in.

He can do nothing about the legislated exclusivity periods, but the ACCC can stop the sort of anti-competitive behaviour the TABs appear to be contemplating.

Samuel is likely to apply the test of "what is best for the consumer" before deciding on what, if any, action he should take. Betting on horses is a difficult area because no state government, or regulator, wants to be seen to be encouraging Australians to gamble more.

People backing horses or willing to bet that a horse can't win are matched by the system's software. The winner pays 2-3 per cent commission to Betfair.

The TABs can argue that it would not be good to have more wagering players competing for the contents of workers' pay packets.

Apart from the arrival, albeit from offshore, of Betfair, the other catalyst is the looming amendments to the Interactive Gaming Act of 2001 which had a sunset clause of two years and requires changes to keep up with gaming developments.

The state TABs see this as an opportunity to slap a federal ban on Betfair.

A Betting Exchange Taskforce established by state racing ministers in response to pressure from the TABs, reported last month that betting exchanges "pose a serious threat to racing integrity" and recommended that no betting exchange licences be issued.

The Northern Territory, which has been more adventurous in its betting regime than the states, disputed the findings and recommendations, thus rendering the report ineffective. A betting exchange could set up in the territory and offer its services to other states under the constitution, which forbids restraints on trade between states.